Overview
A put option is a bet that a share price will fall. In the days before 11 September 2001, the volume of puts on the parent companies of the two airlines whose aircraft were hijacked rose sharply above their usual levels — United's on 6 September, American's on 10 September.
The observation is not in dispute and was noticed immediately. Exchanges flagged it, the Securities and Exchange Commission opened an inquiry, and within days the trading was being cited in the press as possible evidence that someone had known.
What the investigation concluded
The 9/11 Commission addressed the question directly and reported that the trades had been examined and accounted for. Its finding was that the volume looked suspicious and that each trade proved to have an innocuous explanation once traced.
The specific example given has become the centre of the argument. According to the Commission, a single United States institutional investor with no conceivable connection to al-Qaeda bought about 95 per cent of the United puts on 6 September, as one leg of a trading strategy that also involved purchasing 115,000 shares in American on 10 September. An investor betting against one airline while buying stock in another is not positioning for a terrorist attack; the Commission treated the combination as decisive.
Its broader statement was that exhaustive investigation by the SEC, the FBI and other agencies had uncovered no evidence that anyone with advance knowledge of the attacks profited through securities transactions.
The objections
The strongest continuing objection is not from campaigners but from finance academics, who have run the numbers independently and reached less settled conclusions.
Finance researchers have tested the pre-attack options data against models of what normal trading looks like and found the activity difficult to reconcile with chance. Those papers do not identify who traded or claim to know what any trader knew; they argue that the statistical signature of informed trading is present and has not been fully accounted for.
A second objection concerns method. The Commission's conclusion rests on identifications made by investigators whose underlying files were not published. Critics point out that the reassurance is only as strong as work the public cannot inspect, and that the destruction or non-release of SEC records relating to the inquiry has made independent checking impossible.
A third is narrower and more technical: that the emphasis on the largest single trade leaves the rest of the anomalous volume less thoroughly explained, and that an unusual aggregate is not disposed of by identifying its biggest component.
The counter-argument
Those who accept the Commission's account point out that anomalous trading before a major event is a common finding and a weak inference. Options volume is thin enough that a few large positions distort the statistics, airline stocks had been under pressure through 2001, and hindsight makes any pre-event pattern look like foresight.
They also note the practical problem with the alternative. Anyone trading on foreknowledge would have had to collect, and collecting would have meant identifying themselves to a regulator already watching those exact contracts. Much of the money involved in the flagged trades was reportedly never claimed, which cuts both ways: it can be read as evidence that the traders knew they were exposed, or as evidence that there were no such traders and the unclaimed sums are an artefact of how the story has been retold.
Where it rests
The factual core is agreed on all sides: the volume spiked, and it spiked on the two airlines involved. What is contested is whether the explanation offered in 2004 closed the question or narrowed it.
That the most persistent challenges now come from finance researchers rather than from campaigners is part of why the item has stayed alive. It is an argument about statistical inference conducted largely between people who accept the official account of the attacks themselves.